Gner chiefs plan a legal challenge to a decision to allow rival trains to run on the East Coast Main Line.

Bosses at GNER have been fuming since the Office for Rail Regulation (ORR) allowed Grand Central to operate three daily services from Sunderland to London King's Cross.

GNER's chief executive Christopher Garnett labelled the decision a recipe for chaos. The company claims it is unfair because open access operators such as Grand Central, which are not franchised by the Government, do not have to pay fixed charges or premiums.

A legal letter has now been sent to the rail regulator by GNER, giving it until May 2 to avert a High Court challenge.

Mr Garnett said: "This will need to get resolved through the courts. We certainly are taking legal advice."

In March last year GNER agreed to pay about £1.3bn over the duration of a ten year franchise of the East Coast Main Line.

Mr Garnett also likened the impact of the ORR ruling to having taken half of GNER's franchise away.

Grand Central hopes to create up to 50 jobs and has pledged a cheaper and simpler ticketing structure.

Ian Yeowart, the managing director of Grand Central, which hopes to begin the new service by the beginning of next year, said he believed GNER would have to win a court injunction to stop its trains running.

Ernie Preston, a former secretary of the North East Rail Passengers' Committee, said: "It would be a pity if GNER was to get sidetracked through this issue since it has some interesting plans for the future which could bring benefits to passengers.

"From a passenger viewpoint, I am of the firm opinion that there is a demand for what Grand Central is offering which is through services from the Durham coast to London."